Satorp to reach full capacity by year end

London, October 23, 2013

Saudi Aramco Total Refining and Petrochemical Company (Satorp), a joint venture by France's Total and Saudi Aramco, began a gradual startup of its operations and is expected to reach full capacity by the end of this year, industry sources said on Wednesday.

The company will start offering its first jet fuel cargoes from the new 400,000-barrels-per-day Jubail refinery and is expected to offer gasoline and diesel cargoes from next month, they added.

Satorp has offered two jet fuel cargoes of about 30,000 to 40,000 tonnes each for loading in November through private negotiations, the sources said.

The exact specifications of the cargoes were not immediately known but are likely to be jet A-1 fuel which is compatible for use by airlines, a Gulf-based trader said.

Total will offer the first cargoes of gasoline out of the refinery in November, traders said. They said three cargoes were to be offered, though their exact grade was unclear.

A trader in the Mediterranean said the gasoline cargoes would likely remain in the Middle East or Asia.

"It is unclear what the specs are and where it will go, but it will probably stay in the region," he said.

For diesel, Satorp will also likely offer two cargoes in November, though the exact timeline is not firm yet. The cargo was initially expected to be loaded in late September by Total but has been delayed due to "teething issues" in starting up the refinery, traders said.

"It's common for new refineries to have some delays in offering their first spot cargoes, so I think the market expected this," a Singapore-based trader said.

The refinery has so far sold a fuel oil cargo that loaded in late September and a naphtha cargo which is to be loaded in late October, industry sources said.

The fuel oil cargo was shipped to Singapore while the naphtha cargo was sold to a trading house, they added.

Jet fuel production is unlikely to be sustainable in the long term as the refinery is geared towards producing mainly gasoline and diesel to meet rising domestic demand, they said.-Reuters